Sanderson Farms, Inc. (NASDAQ:SAFM) Q3 2017 Earnings Conference Call - Final Transcript
Aug 24, 2017 • 11:00 am ET
Good day, and welcome to this Sanderson Farms Incorporated Third Quarter Fiscal 2017 Conference Call. Today's call is being recorded.
At this time, for opening remarks and introductions, I'd like to turn the call over to Mr. Joe Sanderson. Please go ahead, sir.
Thank you. Good morning, and welcome to Sanderson Farms third quarter conference call. Lampkin Butts; and Mike Cockrell are with me this morning.
We reported net income for our third fiscal quarter of $115.8 million or $5.09 per share. This compares to net income of $54.7 million or $2.42 per share during last year's third quarter. Net income during the quarter reflects the accrual of probable liability under our bonus award plan of $14.4 million before income tax or $0.414 per share after taxes. In addition, quarterly results reflect the accrual of probable liability for our contribution to our ESOP of $12.5 million before income tax or $0.359 per share net of income tax.
I will begin this morning's call with a few general comments before turning the call over to Lampkin and Mike. Before making any further comments, I'll ask Mike to give the cautionary statement regarding forward-looking statements.
Thank you, Joe, and good morning to everyone. This morning's call will contain forward-looking statements about the business, financial condition and prospects of the company. Examples of forward-looking companies includes statements regarding our belief about future grain and fresh chicken prices, consumer demand, production levels, the supply of chicken products and economic conditions and our expansion plans.
The actual performance of the company could differ materially from that indicated by the forward-looking statements because of various risks and uncertainties. These risks and uncertainties are described in our annual report on Form 10-K for our fiscal year ended October 31, 2016, as well as subsequently filed quarterly reports on Form 10-Q. We filed our third quarter Form 10-Q this morning. I caution you not to place undue reliance on forward-looking statements made this morning as each such statement speaks only as of today.
We undertake no obligation to update or to revise our forward-looking statements. External factors affecting our business such as grain costs, market prices for poultry and the overall health of the economy, among others, can become volatile and will remain volatile and our view this morning might be different in a few days from now.
Thank you, Mike. Our third quarter results reflect a continued favorable supply and demand balance for fresh chicken sold to grocery store customers, slightly lower grain cost per process pound compared to last year's third quarter and improved market prices for products produced at our food service plants compared to last year.
Market prices for retail tray pack products remained relatively strong through the quarter. And the average market prices for boneless breast meat, jumbo wings and leg quarters were higher. Export demand supported dark meat prices during the quarter. Jumbo wing prices reflect both the popularity of that product and growing demand because of the growing number of new restaurants